ES4C9 Supply Chain Management

Globalisation

Daniel Law

Who are UNIQLO?• Japan’s No. 1 casual wear brand - “Made for All” motto

• Japan’s biggest clothing company - 6th largest in the world

• Goal to be the world’s largest apparel retailer - sales of five trillion JPY per year by 20201.

• Approx. 800 stores in Japan. 140 stores overseas2.

• “Trading industry” and “Born-global company”.

UNIQLO’s Strategy• UNIQLO’s revenue is around two thirds that of Gap, H&M and

Inditex (which runs the Zara chain).

• UNIQLO has a distinctive business model3. Zara and H&M - Rapid up-to-date fashion UNIQLO sells significantly fewer products – on shelves for longer Same item – variety of colours “We don’t want to chase after fashion trends” – CEO Lower-priced, higher-volume deals with suppliers Managing inventory - simpler and cheaper

Business ModelSpecialty store retailer of Private label Apparel (SPA)5

Source: http://www.fastretailing.com/eng/group/strategy/uniqlobusiness.html

Global Sourcing• 90% of UNIQLO’s products are manufactured in China.

• Business dealings with 70 companies – mostly located in China. UNIQLO view factories as long term partners.

• Material costs brought down due to large-scale world wide network.

• May commit to buy up 100% of the raw materials that a particular supplier can provide4.

Able to negotiate directly with leading global textile manufacturers

5 Year Financial Summary

Source: http://www.fastretailing.com/eng/ir/financial/statement.html

What are the risks?

• Specialty store retailer of Private label Apparel (SPA)

• 90% of production in China Transportation breakdown? Natural disaster? Legal/political issues?

• Economic risks

• Currency risk

What about in 10 years time?

"If Toyota can become a household name, then why not UNIQLO?”Tadashi Yanai - President, Chairman and CEO. FAST RETAILING CO., LTD.

• UNIQLO’s 2020 vision Achieve sales of five trillion JPY per year To be world’s No.1 apparel retailer

• UNIQLO looking to expand more globally Open 300 new stores annually

Thank you for listening

Please feel free to ask any questions